In advanced civilizations the period loosely called Alexandrian is usually associated with flexible morals, perfunctory religion, populist standards and cosmopolitan tastes, feminism, exotic cults, and the rapid turnover of high and low fads—in short, a falling away (which is all that decadence means) from the strictness of traditional rules, embodied in character and inforced from within. — Jacques Barzun

Free Trade

Tonight Hillary Clinton and Barack Obama square off in Austin, Texas. (As I write this, Michelle Obama, in a pre-recorded message, is leaving a message on my answering machine asking me to support Barack.) One thing they agree about is trade. Both think it leads to a loss of American jobs. They’re surely right about that. The real question, however, is whether it leads to a net loss of jobs. Here, the evidence seems to vindicate free trade:

In a speech aimed at labor, Obama said Hillary Clinton “supporting NAFTA didn’t give jobs to the American people.”

Let’s look at the numbers. NAFTA took effect in 1994. The unemployment rate in the three years before was 6.8%, 7.5% and 6.9%. While it had been as low as 5.3% in 1989, in general, it was normal for unemployment to be above 6% and often above 7% in the fourteen years before NAFTA.

Here are the year by year rates through the rest of the Clinton administration: 6.1%, 5.6%, 5.4%, 4.9%, 4.5%, 4.2%, 4.0%. Next we have the “worst since Hoover” Bush recession, and the unemployment rate rises to 4.7%, 5.8% and 6.0%, then back down to 5.5%, 5.1%, 4.6% and 4.6%.

In other words, after NAFTA, unemployment drops precipitously and stays down.

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4 Responses

What I don’t get is Hillary and NAFTA. Let me preface this by saying that I thought and still think NAFTA is/was a good idea.

I saw Hillary on TV, and someone asked her about NAFTA (not in this most recent debate, but some time back) and whether she thought it was a mistake. She chuckled and said “Oh, all I can remember from those NAFTA discussions were a lot of charts and graphs” or words to that effect.

So either Hillary really can’t remember/never understood NAFTA, as she claims, or she really believes now that it was a mistake, but she won’t admit it. OR she believed and still believes it was a good idea but won’t admit it.

I agree. I don’t see why she doesn’t say that she considers this one of her husband’s primary achievements. The result has been the creation of millions of jobs in the US and in Mexico. As our immigration debate shows, improving the Mexican economy is very good not only for Mexico but for the United States as well. Yes, some people lost jobs as a result, but there have been programs to help them, and the net effect has been strongly positive. Not only does all this have the benefit of being true, but it keeps her in the strong position of defending the Clinton administration and its handling of the economy, which was, after 1994, anyway, very good; of championing economic growth; of championing improved conditions in Mexico; and of championing something important that connects to the immigration issue. It loses her union support, but she’s lost that anyway, and foreseeably so, if I’m right about Obama having been selected long ago by powerful figures in the Democratic party as the anti-DLC candidate.